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      • Department of Economics
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      The determinants of privatization prices: evidence from Turkey

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      Author
      Arin, K. P.
      Okten, C.
      Date
      2003
      Source Title
      Applied Economics
      Print ISSN
      0003-6846
      Electronic ISSN
      1466-4283
      Publisher
      Routledge
      Volume
      35
      Issue
      12
      Pages
      1393 - 1404
      Language
      English
      Type
      Article
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      Abstract
      This paper analyses the determinants of privatization prices in a multi-industry study using a sample of 68 recently privatized firms from Turkey. Results show that revenue and market characteristics are significant determinants of privatization prices while current cost and profit indicators are not. It is argued that potential buyers regard these state firms as inefficient, therefore do not take into consideration their current costs and profits in determining their value. When the dependent variable is altered by dividing the firm's privatization price by the firm's sales (revenues), it is found that sales-adjusted privatization prices are responsive to firms' profit margins. However, this result does not hold when the sample is restricted to a single industry. Profit margins along with other profitability and firm efficiency measures are no longer significant determinants of sales-adjusted privatization prices in the cement industry analysis. Unexploited production opportunities measured by capacity utilization ratios, and complete private ownership resume a more important role.
      Keywords
      Economic reform
      Price dynamics
      Privatization
      Profitability
      Permalink
      http://hdl.handle.net/11693/24446
      Published Version (Please cite this version)
      http://dx.doi.org/10.1080/0003684032000100391
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      • Department of Economics 649
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